R.I. auditor: PawSox need attendance surge to pay stadium costs

Monday

Dec 4, 2017 at 6:55 PMDec 4, 2017 at 10:28 PM

Auditor General Dennis E. Hoyle and a Commerce Corporation official say the team has stable finances, but is "largely dependent" on a hoped-for increase in fan attendance, and the sale of naming rights, to cover their share of costs for a new ballpark.

Mark Reynolds Journal Staff Writer mrkrynlds

The Pawtucket Red Sox minor league baseball team has stable finances, but the team’s ability to pay its share of the bill following construction of a new stadium would “be largely dependent” on a hoped-for surge in fan attendance, according to a financial analysis by Rhode Island Auditor Dennis E. Hoyle.

Hoyle, who performed the analysis at the request of Senate President Dominick J. Ruggerio, said the PawSox's ability to make lease payments and cover their portion of construction costs would also depend on “the potential sale of naming rights …”

Hoyle revealed his findings on the stadium deal Monday. At the same time, the Rhode Island Commerce Corporation’s head of investments, Jesse Saglio, gave his conclusions following his own review, agreeing that the team’s finances are stable.

“While the team currently generates modest positive cash flow," wrote Saglio, "material new financial liabilities ... would require additional cash flow ... beyond what the team currently achieves ... ”

A new debt-service payment “appears to be supportable from a cash-flow perspective” based on “the team’s anticipated attendance increase” and its “operating assumptions,” says the letter that Saglio submitted to legislative leaders after his review.

The letter also cites data showing attendance at some new ballparks was, on average, 97-percent greater in the third year of operation than attendance in the final year of old ballparks. The data was from a survey of all 16 Triple-A and Double-A ballparks newly opened since 2007.

Under the proposed deal, the team would pay $12 million upfront and the Pawtucket Redevelopment Agency would issue bonds that the team, state and city would pay back over 30 years. Those bonds could total $84 million, including money set aside in reserves.

Each of the three entities would be on the hook to pay back a portion of stadium construction costs. The PawSox would pay $33 million for example while the City of Pawtucket would pay $15 million.

Ruggerio has floated a proposal under which the City of Pawtucket would receive revenue taken in for naming rights, not the PawSox.

But Hoyle's view that the PawSox would largely depend on "potential" naming rights revenue in addition to revenue from increased game attendance to cover construction costs and lease payments might pose a wrinkle.

— mreynold@providencejournal.com

(401) 277-7490

On Twitter: @mrkrynlds

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